tv First Business KICU September 20, 2013 4:00am-4:31am PDT
traders share bold predictions on where stocks are headed from here. in today's cover story, apple fans are lining up for the latest iphone. what we know that they don't. plus, is the trading floor overly obsessed with fed gossip? and, inside the facility providing america's doctors with a refresher course. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas good morning!it's friday, september 20th. i'm angela miles.in today's first look: stocks take a breather. one day after a record ride to the upside for the dow and s&p
500 the blue chips pulled back 40 points. the nasdaq gained 5 and the s&p fell 4.gold continues to gain momentum. yesterday-- futures rushed up $58. oil fell back abother $1.85.meanwhile-- mortgage rates tumble.now that the federal reserve plans to continue taking measures to stimulate the economy the 30 year fixed is averaging 4.5% the 15 year is 3.54%.and words of wisdom for wall street are coming from billionaire investor warren buffett and bank of america ceo brian moynihan.buffett tells cnbc fed chair ben bernanke did a terrific job during the financial crisis and should continue leading fed while moynihan says he sees little risk to the economy. scott shellady of trean kicks it off for us this morning. he has his eyes on the trading market. good morning to you scott. > >good morning. > >what do you suspect the friday trade will look like? it is an options expiration day. > >it's also a full moon i believe too so we've got a lot
of things to worry about. but ultimately, what happened with the fed this week is going to power this market higher whether it's today or next week. there's a lot of money on the sidelines, it's been a non- participatory rally so i wouldn't want to get in front of this thing right now because i think that they've just poured petrol on this fire. > >there have been some wonderful trading opportunities if you caught it right and a lot of it has to do with the fed. the moves that we've seen in the treasuries and teh spx. what will be the next big trade? you can even name apple if you want. > >no, i'm not gonna name apple. i'm gonna make a big, bold call here and i say that that two year grinds from somewhere around 2 1/4% from its 270 level yesterday. so i think that ultimately, we're gonna slowly but surely see that tenure grind lower where most folks don't think that's gonna be the case. so that yield goes down or those bonds rally but ulimately that's what we're gonna see because this economy is just not doing very well. > >in you estimation, gold is still gaining. what do you think that is telling us? > >gold is gaining because the
dollar is going down. if you really think that gold is the metal for some sort of armageddon, i think you should buy lead instead. so i'm gonna stay away from the gold trade. i think we're headed toward deflation. and $1400 gold during a deflationary time looks way too high to me. > >we had a negative nellie on the show yesterday talking about how everything is just falling apart with the economy so i was hoping you'd have more of an optimistic view today, no? > >well, i'm pessimistically optimistic. so i really do think that there have been some green shoots---but there's no way we can get around the fact that this has been the worst recovery we have ever seen. > >you used the word recovery--- i'll stop there. thanks scott. in our cover story, the apple faithful have felt excitement as well as angst, this week eagerly awaiting the new iphone 5-s and 5-c that are available today. but also finding the new operating system slow to download and not altogether compatible with some earlier model iphones. it took fred brisco more than an hour to download apple's new operating system. frustrated, he called apple.
"they was like saying it's got to be the server, 'cause everybody's trying to download it. wait a couple hours later. " once downloaded, it worked fine on an iphone 5, released last year. but the older your iphone or ipad, the less likely it seemed to work. "on the older phones, there are problems with it and there are a number of features not working and people are highlighting that as well. "you will have problems with the 4 and 4s. the processor is not equipped to be fully functional on those older models." still, brisco was among the first three camped in line for the new iphone. "me personally, i'm out here 'cause i just want a new phone. i like the colors and the thumb id thing--i think that's amazing." "with the 5s, you use your thumb to open it up. (why is that important?) nobody will get your information." "the whole thumb thing, i don't care about that. just put a password in there and no ones
gonna get in there." all three agreed, initial reviews for the new i-phone have been glowing, in advance of apple's product launch. rob enderle offers this explanation. "they have a deal with reviewers who, if they review negatively, are never again given any advance copy of an apple product. these reviews are far more positive than the 2nd or 3rd sets. " despite numerous attempts, apple provided no response for the download delays, or the suggestion that early product reviewers are discouraged from negative comments before a product launch. house speaker john boehner says the house will vote on a bill today that would keep the government running, but strips funding for obamacare.speaking with business leaders thursday president obama had this to say about health care reform rules that are already in place.
"actually a lot of what we've done is starting to bear real fruit, and it has an impact on the bottom lines of american businesses as well as the american people." the house has voted 40 time to defund health care reform.congressman boehner says now its time for the senate to take up the fight. the house has approved legistation cutting $39 billion dollars from food stamp programs. no democrats voted in favor of the bill. 15 republicans voted against it. in the end there were 217 yes votes and 210 nos. the legistation was created by gop house majority leader eric cantor.republicans stressed funding cuts to food stamps is needed to stop runaway spending in the program.several democrats called it a cruel step that would hurt people in need. the measure moves next to the senate. the us postal service is in the midst of a crisis. postmaster general patrick donahoe told a senate committee yesterday-- the usps may need an emergency increase in postal rates to continue to operate. donahoe is pleading with lawmakers to allow the postal service to end saturday mail
delivery and reduce its annual payments for future retiree health benefits-- the prepayments are mandated by congress. a wave of fines for jpmorgan chase. the bank will pay a whopping 920 million dollars in connection with the london whale trade which led to the bank's 6 billion dollar loss last year. the fine goes down as one of the largest ever for a single trade. ceo jamie dimon responded stating: "we have accepted responsibility and acknowledged our mistakes," also ....the bank will refund 309 million dollars to credit card customers. the consumer financial protection bureau says chase wrongfully charged add-on protection without customer consent. the "infomercial king" is free...for now. kevin trudeau was thrown in jail wednesday night.trudeau - who ran an infomercial business in illinois - is accused of misrepresenting products - and then hiding his income in overseas accounts.he was recently caught transfering $20,000 from an account in
austrialia and using the money on expsenive haircuts, liquor and food. trudeau says he spent the money because he has no cash or credit. beanie baby mogul ty warner is pleading guilty to tax evasion. he failed to report more than $3 billion in income that was hidden in an swiss bank account. warner - whose personal wealth from his plush toy empire is worth more than $2 billion, according to forbes "richest americans" list - will pay $53 million in penalties. he's expected serve five years in prison. a guilty plea is also coming in from halliburton. the oilfield services company will pay $200,000 to the department of justice for destroying evidence following bp's 2010 oil spill in the gulf of mexico.halliburton did the cement work on the well that blew to pieces in the explosion aboard the deep water horizon oil drilling rig.earlier, halliburton said it would pay $55 million to a wildlife organization. in today's ipo watch...rocket fuel-is set to debut on the
nasdaq this morning.the tech company is in the digital advertising field.shares priced in last night at $29 dollars -- the top end of the range. the stock will trade under the ticker: fuel. twitter is moving forward with it's own public offering. the social media site is reportedly considering adding more banks to it's ipo process.twitter has an estimated value of $15 billion dollars.also, cnbc reports chrysler is likely to choose jpmorgan chase as the lead underwriter for it's ipo. that filing could happen later this month. a massive jet order is split between two competitors. german airline lufthansa has placed a 19 billion dollar order with boeing "and" airbus. the order includes 34 boeing jets and 25 airbus models.lufthansa is replacing its fleet as it faces competition for flights to asia. ralph lauren is making over its management team for the first time in more than a decade. the shuffle will consist of moving
president and coo roger farah to the executive vice chairman post. many investors credit farah for the success of ralph lauren's stock, which has risen from 18 dollars in 2000 to 168 dollars today. the stock gained 18% yesterday. nokia has a rather expensive parting gift for its ceo. stephen elop will receive 25 million dollars in compensation. he joined nokia after leaving microsoft in 20- 10, but is now moving back to microsoft, as the two companies merge. its rumored elop may replace microsoft's ceo steve ballmer when he leaves within a year. holiday helpers are in demand at kohls. though the christmas shopping season hasn't even started, the retailer is already saying it expects to hire 53 thousand workers, or an average of 40 per store. stores are expected to be fully staffed for the season by mid- november. there's plenty more just ahead.... find out if it's better to rent or own as housing prices rise but mortgage rates drop. plus-- how a role playing using state of the art
hi, i'm ben affleck, and many actors have played the part of u.s. servicemen in the movies, but for veterans like james crosby their service and their sacrifice are real. and too often when they come home, their struggle continues. for over sixty years, paralyzed veterans of america has been fighting to help our injured veterans get the benefits they need, and have earned. paralyzed veterans of america was there for me when i came home. join me in supporting our paralyzed veterans. visit p-v-a dot org. it's still a seller's market. but the gap between which is more affordable-- buying or
renting has narrowed a bit. the housing website trulia reports renters will pay about 35% more than buyers in the current market. but last year, renters paid about 45% more than home buyers. the spike in home prices is largely the reason. home prices rose 14.7 percent in august. jed kolko of trulia says expect prices to continue upward. " it looks like home prices will continue to rise but not as quickly as they were earlier this year. we're seeing more inventory come onto the market. and that will help slow down those price gains." trulia reports buying is cheaper than renting in all one hundred of the largest metropolitan areas of the u.s. the biggest discount is in detroit where it is 65% cheaper to buy than to rent. florida is becoming a critical destination for doctors. the largest and most advanced medical simulation facility is located in tampa. jackie keenan reports on how its improving the health care industry. this could be any hospital room
in the country - an elderly grandmother looking over her grandson who is getting very sick, very quickly. a medical team rushes in - asks questions - and treats the patient. luckily this is all for practice. it's medical simulation. and dr. luis luano is happy with the performance of this team, except they ignored grandma. grandma was thrown off there to the side wasn't she medical simulation allows doctors to learn new skills without the risk of injuring a patient. it's not a new practice, but here at the center for advanced medical learning and simulation, or camls, in tampa, florida, it's the largest and most technologically advanced of its kind. affiliated with the university of south florida medical school, here medical professionals like pharmacists, nurses and physician assistants train together on even the most vulnerable of life-like patients. opened 18 months ago at a cost of 38 million dollars, camls is a 90 thousand square foot
facility and is a destination for doctors all across the world. 14,000 visitors have come through camls, including medical professionals from the military who train in this room where battlefield trauma is simulated. medical simulation is more important than ever as hospitals strive for ways to save money. 18 percent of hospital patients end up with an accident-related injury and the cost of errors is estimated at nearly 17 billion dollars a year making sure medical mistakes are minimized will help keep healthcare costs down. camls is all about linking training and performance. better patient outcomes means fewer medical errors and shorter hospital stay. but the benefits of simulation haven't really been measured, which is something they're trying to rectify at camls
that is the challenge, that's what we're trying to do nationally where we can link simulation to outcomes. we're beginning to see to measure the outcome and impact. for now, it's all subjective. i-c-u nurse ted scott feels more confident after his critical-care course and will be teaching what he learned to his fellow nurses. you learn new ways to do something more efficient so you can bring it back to your own facility. for first business news, i'm jackie keenan the government accountability office estimates that 44,000 deaths occur each year due to medical errors. coming up.... i-phone i-q. as consumers get their hands on the latest iphone, we'll find out how well traders know the company. and later, why the fed's latest move has some money managers smiling. it's all just ahead on first business.
hi, i'm ben affleck, and many actors have played the part of a u.s. serviceman in the movies, but for veterans like james crosby and so many other brave men and women, his service and his sacrifice for our country are real. outside baghdad, a rocket attack blew up my humvee, killing one of my marines and leaving me paralyzed. [ben affleck] when james returned home, he, like many others, was in no condition to cope and advocate for the services he needed. fortunately, paralyzed veterans of america's trained experts were there to help him so he could concentrate on getting well. for over sixty years, paralyzed veterans of america has worked to ensure
that our injured veterans get the medical, housing and auto benefits they have earned. i'm so thankful paralyzed veterans of america was there for me. surely those who sacrificed so much deserve no less. join me in supporting our paralyzed veterans. visit p-v-a dot org. get ready. the guys are here for traders unplugged. traders alan knuckman and james
ramelli are prepared to tackle tough questions from the floor of the cme group. hello guys! > >good morning angie. > >topic number one: sheeple?- citigroup claims that the s&p500 target price should be 1900 for the end of 2014. do traders buy into this? alan: i think that people are not respecting this overall trend. and that's not that far away in percentage terms. if you look at the pe ratio historically, that could very easily happen because we're still below the peak that we had in 2007 from the price to earnings. cause it's all about earnings in my opinion when it comes to stocks. james: a lot of people make arguments at this level that valuations are getting a bit stretched. and really that doesn't matter with the interest rate environment we have right now. if the fed is able to keep the bond market under control, i think that is a very realistic target. alan: the market doesn't know high or low, only people have an emotional tie to what they think is high or low. angie: topic number two: does chatter matter? from tv shows to trading floors. all the talking heads were saying that the fed
was likely to taper. was this just a lot of chit chat? james: so they had the entire street completely convinced that the taper was 100% going to happen. interest rate complex was the most short it's been in the last three years across 2s, 5s, 10s---all the way through the long end of the curve. the vix was the most short it has ever been. alan: the masses are usually wrong when everyone has one complete opinion.a bloomberg survey had 60 economists and 30 said the taper was going to be 5-10 billion and the other 30 said more. so everybody got it wrong but i don't know why they were so convinced that things had to change. the thresholds are very specific---6 1/2% employment and 2% inflation-- those are the thresholds to start talking about it. why people thought it had to happen now is beyond me. go with what the markets give you. angie: topic number three: flush money---the nfl is endorsing man wipes. is this a reason to buy some of the stocks that have to do with the toilet paper industry, which by the way is an 8.7 billion dollar industry.
alan: and it's recurring revenue. people have to us the bathroom so let's remember that. you're looking at either proctor and gamble or kimberly clark. i like kimberly clark. i think we get back over to that 106-108 level we can go to 130. there's more upside in kimberly clark. with proctor and gamble, it's kind of a dead stock---it doesn't move much. it's been trading between 82 and 74 for most of the year. james: i actually think proctor and gamble looks a lot better on the chart. it looks like it's primed to break out. it's about $2.50 off of its 52 week high. it's got some strong support about $2 lower. lean on those levels and i'd be looking to play a break out of proctor and gamble here. if i'm bullish in the market i gotta be bullish in p &g angie: here's your bonus round question for today. apple is out with it's new phone today. how well do you know the company? which statement is not true? which statement is false. the first apple logo feature isaac newton, the name macintosh was inspired by the apple variety, and the company came close to being called johnny appleseed. alan: the last one's not true. james: the last one has to be
capital joins us for some chart talk on this friday. good morning. > >good morning angie. > >you manage people's portfolios. you know what happened this week with the fed---but is it time to stop obsessing about the federal reserve and keep a closer watch on the charts? > >absolutely. and with the market moving to fresh highs, that's exactly what the fed is trying to do. they said stop gaming us, stop obsessing about what we've been ding. we're going to keep on buying bonds and what they did was created an environment where 10 year yields which had been surging up to 3% affecting so many investments, fell dramatically. so the big story with the fall in yields to about 2.75 on the 10 year not and all those interest rate stocks---the utilities, the infrastructure plays all of a sudden went up 2 and 3 and 4 and 5%. that was huge and it was great for everyone's portfolios notwithstanding of course, the market hitting fresh highs. > >what is your game plan as far as equities? > >equities, finally those conservative stocks, look good
because the fed sent a message that we're going to continue what we're doing, stop trying to push yields up, and that's great for the entire economy and all the conservative dividend paying stocks in addition to the growth stocks that's been leading so far this year. > >what names specifically are you watching in the stock market matt? > >if you're comfortable with tobacco investing, definitely those are great because they pay good dividends. all the big major integrated oils really haven't done so well this year and i think they're attractive. if you can catch these growth stocks on a pullback, there's still a lot of room to go in this market. > >matt, thank you and have a great weekend. > >you too. coming up monday --- cruise concerns. everything you need to know from the best time to book a trip to the effect trouble at sea is having on ticket prices. as we sail out of here for today.. we wish you a wonderful weekend.
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